As Australia continues to grapple with a growing demand for housing, the Federal government has set ambitious targets to put 1.2 million more homes in circulation by 2029.

To achieve this, bureaucratic obstacles are being challenged, and approvals for developments are expected to flow more smoothly in the coming years.

However, amid this backdrop of housing reforms, another potential solution is waiting in the wings.

With the greatest segment of the housing shortfall being in the lower end of the market and rents continuing to rise in the face of this shortfall, 'Build-to–rent’ developments could pose a potential solution to increasing the supply of social or affordable rental properties in the market. 

Build-to-rent developers or investor-groups like Real Estate Investment Trusts or Private Equity Firms invest in these housing complexes or a significant number of units, with the goal of retaining ownership and leasing them long-term, rather than selling the properties. 

Unlike traditional property developments where units are sold to individual buyers, build-to-rent focuses on creating purpose-built rental accommodation managed by a single entity.

This approach offers numerous advantages for both investors and tenants, with new opportunities for property ownership and rental experiences.

The scale of build-to-rent projects make them an attractive prospect for institutional investors seeking to diversify their portfolios and tap into a resilient asset class.

Unlike traditional buy-to-sell models, build-to-rent offers more steady, long-term income potential with less market fluctuations and lower vacancy risks.

Despite the potential benefits of build-to-rent, developers face several challenges in bringing these projects to fruition. Securing suitable sites in prime locations, while navigating complex planning regulations, and securing financing are just some of the hurdles developers must overcome.

Additionally, convincing stakeholders of the viability and profitability of build-to-rent models requires a paradigm shift in thinking, emphasising long-term benefits over short-term gains.

For tenants, build-to-rent represents a welcome departure from the uncertainties of the traditional rental market.

More flexible lease terms, responsive, centralised property management, and a range of communal facilities foster the potential for mutually beneficial rental agreements.

Balancing the interests of investors, developers, and tenants requires supportive measures such as streamlined planning processes and tax incentives that encourage investment in build-to-rent projects, while also ensuring adequate tenant protection and affordability safeguards that prioritise the long-term sustainability of the rental market.

With a growing demand for rental housing driven by demographic shifts and lifestyle preferences, build-to-rent developments are well-positioned to capitalise on the need for high-quality, purpose-built, affordable, long-term rental housing solutions.

As the government continues to prioritise housing affordability and supply, build-to-rent is expected to play a pivotal role in meeting the evolving needs of tenants and investors alike.

However, realising the full potential of build-to-rent will require collaboration between government, industry stakeholders, and the community to overcome barriers and unlock opportunities for sustainable growth.

As income-producing properties, all build-to-rent investment properties hold significant depreciation potential for the investors.

Due to the ongoing changes in laws and regulations surrounding the build-to-rent investment space, property developers and institutional investors will benefit from having specialist quantity surveyors like BMT Tax Depreciation on their team to ensure ATO compliance and to optimise the property depreciation strategy for their build-to-rent developments.

As Australia’s number one choice in property depreciation, BMT Tax Depreciation has completed close to 1 million depreciation schedules and can assist you in maximising the depreciation deductions on your investment property.

For more information contact us on 1300 728 726 or visit bmtqs.com.au to request a quote. 

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